Lenovo has agreed to acquire Motorola Mobility for $2.9 billion from Google. Google and Lenovo announced the deal, it will be closed in the next few months. As part of the deal Lenovo will get the Motorola smartphone business, and some Motorola patents. Google will retain maximum number of patents according to reports and also advanced technology business including the Project Ara related to the modular smartphone.
The total deal is for 2.91 billion and out of which $1.41 billion will be paid at the close of the deal, the rest $1.5 billion will be paid in the form of a promissory note for three-year period. Lenovo is a Chinese company which acquired IBM’s PC business in 2005, it also has a smartphone business, with the acquisition of Motorola it will have world class tech and also access to the North American market.
Lenovo will get the Motorola Mobility brand and trademark, it will also receive 200 patents from Motorola as part of the deal. Lenovo will also receive licenses to Motorola patents. Google will retain the huge patent portfolio of Motorola. Google acquired Motorola for $12 billion and the main reason for that acquisition is the huge patent portfolio of Motorola according to analysts. That is the reason Google is retaining the patents and the rest of the company is going to Lenovo.
“The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones. We will immediately have the opportunity to become a strong global player in the fast-growing mobile space,” said Yang Yuanqing, chairman and CEO of Lenovo.
“Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere,” said Larry Page, CEO, Google.
“As part of Lenovo, Motorola Mobility will have a rapid path to achieving our goal of reaching the next 100 million people with the mobile Internet. With the recent launches of Moto X and Moto G, we have tremendous momentum right now and Lenovo’s hardware expertise and global reach will only help to accelerate this,” said Dennis Woodside, CEO, Motorola Mobility.